Procter & Gamble vs Unilever: A Case of Corporate Espionage


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Case Details:

Case Code : BECG036
Case Length : 16 Pages
Period : 2001 - 2004
Pub. Date : 2004
Teaching Note :Not Available
Organization : Procter & Gamble, Unilever
Industry : FMCG's
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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A Shocking Revelation Contd...

However, some analysts argued that P&G had made a mistake by voluntarily disclosing its transgression to Unilever. Commenting on this, Leonard Fuld (Fuld), President, Fuld & Co., (a competitive intelligence consulting firm in Cambridge) said, "P&G made a mistake. What the magnitude of the infraction might be, we do not exactly know."5

Another source, who was close to the story, expressed similar feelings, "It was like confessing to murder and hoping to get manslaughter instead of homicide. It just does not always work out that way."6

Referred to as the darker side of competitive intelligence (CI), instances of corporate espionage have been often reported in the global corporate world. However, the P&G and Unilever issue was arguably one of the most high-profile incidents of corporate espionage ever reported. While P&G and Unilever were busy negotiating their settlement terms, the debate over 'CI vs. corporate espionage' heated up like never before.

Competitive Intelligence vs. Corporate Espionage

Fuld described CI as a technique of applying industry/research expertise to analyze the information available on competition from public sources and draw conclusions based on this data. A typical CI activity involved collection, organization, analysis, and utilization of business-related data of competitors to make informed decisions (See Exhibit III for the steps in a CI cycle).

Explaining the rationale behind CI practices, Bill Waite, Managing Director and Senior Counsel, Risk Advisory Group, a leading CI consultancy in Europe, said, "The fundamental is that there are huge amounts at stake when you make business decisions these days. The more you know, not only about your own strengths but about your competitors', the more likely it is that you will reach a positive business transaction rather than a negative one."7 Analysts felt that companies needed to be aware of their competitor strategies and efforts to effectively counter their strategies and sustain themselves in the market. Such companies believed that "if you are not watching your competition, you are busy creating it"8...

Excerpts >>


5] "Competitive Intelligence Guru Fuld: Media Confuses Dumpster Diving With Competitive Intelligence," Business Wire, September, 06, 2001.

6] "P&G's Covert Operation," Fortune, September 17, 2001.

7] "Spies in Suits," www.guardian.co.uk, January 10, 2001.

8] "Corporate Espionage," www.pcquest.com, May 05, 2003.

 

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